Babcock & Wilcox(BW) - 2025 Q2 - Quarterly Results

Company Overview & Key Highlights Babcock & Wilcox achieved strong Q2 and H1 2025 financial performance, strategic growth, and improved financial stability Q2 2025 Continuing Operations Financial Highlights Q2 2025 saw 31% global parts and services revenue growth, adjusted EBITDA exceeding expectations, and a significant reduction in net loss - Global parts and services revenue increased by 31% year-over-year[5] - Adjusted EBITDA (including Diamond Power International) reached $21.6 million, exceeding market expectations of $12.3 million by 76%[5] - Net loss from continuing operations was $6.1 million, a significant improvement from $20.1 million in Q2 2024[5] - Backlog from continuing operations reached $418.1 million, a 49% increase year-over-year[5] - Completed the sale of Diamond Power International, generating $177 million in total proceeds[5] First Half 2025 Continuing Operations Financial Highlights H1 2025 revenue grew to $299.9 million, global parts and services revenue increased, operating profit turned positive, and adjusted EBITDA doubled First Half 2025 Continuing Operations Financial Highlights | Metric | H1 2025 (million USD) | H1 2024 (million USD) | Change | | :-------------------------------- | :---------------------- | :---------------------- | :----- | | Revenue | $299.9 | $292.3 | 2.6% | | Global Parts & Services Revenue | $131.9 | $105.1 | 25.5% | | Operating Profit (Loss) | $8.4 | $(3.5) | Turned Positive | | Net Loss from Continuing Operations | $(20.1) | $(38.2) | 47.4% Improvement | | Loss Per Share from Continuing Operations | $(0.28) | $(0.51) | 45.0% Improvement | | Adjusted EBITDA from Continuing Operations | $21.2 | $10.8 | 96.3% | CEO Commentary & Strategic Outlook CEO Kenneth Young highlighted B&W's strong position in baseload power demand, robust Q2 performance, 49% backlog growth, and improved financial stability - B&W is uniquely positioned to capitalize on growing North American and global baseload power demand, driven by AI, data centers, and economic expansion[7] - Q2 operating performance was strong, with adjusted EBITDA significantly exceeding company and market expectations, and backlog growing 49% year-over-year[7] - Through asset sales, debt reduction, and improved cash flow, the company has eliminated prior substantial doubt about its ability to continue as a going concern, positioning it to win new plant upgrades and data center projects[7] - Completed the sale of Diamond Power International, generating $177 million in total proceeds, further strengthening the balance sheet and used to repay existing debt[7][9] - Private note exchange reduced annual interest expense by $1.1 million and extended debt maturity to 2030[9] Detailed Financial Performance This section details the company's Q2 and H1 2025 financial results, including statements of operations, balance sheets, and cash flows Q2 2025 Continuing Operations Financial Summary Q2 2025 revenue slightly decreased to $144.1 million due to project timing, but global parts and services revenue grew significantly, leading to positive operating profit and improved adjusted EBITDA Q2 2025 Continuing Operations Financial Summary | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | Change | | :-------------------------------- | :---------------------- | :---------------------- | :----- | | Revenue | $144.1 | $151.4 | (4.8%) | | Global Parts & Services Revenue | $64.8 | $49.3 | 31.4% | | Operating Profit (Loss) | $8.1 | $(4.4) | Turned Positive | | Net Loss | $(6.1) | $(20.5) | 70.2% Improvement | | Loss Per Share | $(0.10) | $(0.26) | 61.5% Improvement | | Adjusted EBITDA | $15.1 | $8.0 | 88.8% | First Half 2025 Continuing Operations Financial Summary H1 2025 revenue increased to $299.9 million, driven by global parts and services, with operating profit turning positive, net loss significantly narrowing, and adjusted EBITDA doubling First Half 2025 Continuing Operations Financial Summary | Metric | H1 2025 (million USD) | H1 2024 (million USD) | Change | | :-------------------------------- | :---------------------- | :---------------------- | :----- | | Revenue | $299.9 | $292.3 | 2.6% | | Global Parts & Services Revenue | $131.9 | $105.1 | 25.5% | | Operating Profit (Loss) | $8.4 | $(3.5) | Turned Positive | | Net Loss | $(20.1) | $(38.2) | 47.4% Improvement | | Loss Per Share | $(0.28) | $(0.51) | 45.0% Improvement | | Adjusted EBITDA | $21.2 | $10.8 | 96.3% | Condensed Consolidated Statements of Operations Condensed consolidated statements show a net loss attributable to shareholders of $58.5 million for Q2 2025 and $80.5 million for H1 2025, primarily due to losses from discontinued operations, despite improved operating profit from continuing operations Condensed Consolidated Statements of Operations (Selected Items) | Metric (million USD) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Revenue | $144.1 | $151.4 | $299.9 | $292.3 | | Operating Profit (Loss) | $8.1 | $(4.4) | $8.4 | $(3.5) | | Loss from Continuing Operations | $(6.1) | $(20.5) | $(20.1) | $(38.2) | | (Loss) Income from Discontinued Operations, Net of Tax | $(52.4) | $46.0 | $(60.4) | $46.7 | | Net (Loss) Income Attributable to Shareholders | $(58.5) | $25.4 | $(80.5) | $8.6 | | Basic (Loss) Earnings Per Share (Continuing Operations) | $(0.10) | $(0.26) | $(0.28) | $(0.51) | Condensed Consolidated Balance Sheets As of June 30, 2025, total assets decreased to $703.5 million, while total shareholders' deficit worsened to $308.7 million, driven by accumulated deficit, with current liabilities increasing and long-term senior notes decreasing due to debt exchange Condensed Consolidated Balance Sheets (Selected Items) | Metric (million USD) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total Current Assets | $526.9 | $552.5 | | Total Assets | $703.5 | $727.0 | | Total Current Liabilities | $529.3 | $406.7 | | Senior Notes, Net of Current Portion | $102.2 | $340.2 | | Senior Notes Due 2030 | $124.9 | — | | Total Liabilities | $1,012.2 | $1,010.2 | | Total Shareholders' Deficit | $(308.7) | $(283.2) | Condensed Consolidated Statements of Cash Flows In H1 2025, net cash used in operating activities increased to $33.8 million, net cash provided by investing activities significantly decreased to $10.6 million, and net cash provided by financing activities fell to $2.6 million, resulting in a net decrease in cash of $20.3 million Condensed Consolidated Statements of Cash Flows (Selected Items) | Metric (million USD) | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | | Net Cash Used in Operating Activities | $(33.8) | $(26.7) | | Net Cash Provided by Investing Activities | $10.6 | $76.0 | | Net Cash Provided by Financing Activities | $2.6 | $81.6 | | Net (Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash | $(20.3) | $130.7 | | Cash, Cash Equivalents, and Restricted Cash at End of Period | $110.8 | $202.1 | Segmental Performance